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My wife just finished work today (that job forever) to go on maternity leave and then bring up our kids. The company is paying her 4 weeks at 90% then the statutory maternity pay which I think is £108 a week for about 9 months. Due to tax reasons she asked them not to pay it all at once and leave it until the next tax year. They refused so she received her payslip this afternoon with over a grand tax being taken off. Now a lot of the money she has been taxed on she should be getting in the next tax year where due to not working she will be receiving less than the lower limit so should pay no tax on it.
What I want to know is can she get the money back and if so how?
I know she should get it back and its wrong that she paid it in the first place but will she.
Worst comes to worst and whoever (the tax office?) wont give it back then I think its a story that the Daily Wail will love. Large Accounting Firm and Tax Man Scam Young Mother of Two!
Please help.
Wrong effing forum can somebody please move it.
She'll get it back but it will be after April 5th. No harm chasing them up after this time but they iwll only know what she earned in that tax year probably after her April payslip. Therefore they can give a refund thereafter.
Do you think it will be an automatic rebate or will we have to prove that she wasnt supposed to receive the money until a later date?
I would have thought if she received it this year, then it comes off this year's allowance. Her employer is in effect paying her 9 months maternity pay in lieu of notice.
Aye - I'm pretty sure it's when it's paid that matters - not the period it covers. If she's been paid in 2008/9, then it'll be taxed in the same year.
But its supposed to be spread over the 9 month or so term and they paid it in a lump sum against the wishes of my wife.
That's not the fault of the tax office. I just can't see how they'll allow this to be somehow taxed at next years rates (just think of the discrepancies in things like Personal Allowances - which one applies?)
I take it she is still planning on returning to work - and is therefore still an employee? If so, she needs to get them to pay her over the proper period. If they are refusing to do this, she needs to seek legal advice.
No thats it she has finished there now no longer an employee.
In that case, how can they carry on paying her into next year? How would they handle PAYE / NI etc?
Pay it, claim it back, no other option.
druid I dont know thats one of the reasons Im asking.
I may be missing something here, but it sounds like they have made a redundancy payment dressed up as maternity pay. If that is the case and they are making her redundant, then [b]should she still not be eligible for statutory maternity pay[/b], paid for by Government, for 9 months irrespective of what she has been paid by the company?
If they have made her redundant, then the company will not be able to claim that back from the Government and so she should still be eligible for it directly.
Like I say, I may be way off the mark, but it would be worth checking.
If it's severance pay, then it should be tax free (up to £30k) anyway.
I_Ache I think you answered your own question when you said "No thats it she has finished there now no longer an employee."
It looks as if the money your wife's employer has paid to your wife was an amount that she was legally entitled to, however as she is now no longer an employee then they would have had to pay it in one go hence the large Tax deduction. Your wife will now have to wait until after 5th April before she can make a claim for any tax overpaid in 2008/09.
With all due respect you stated your wife worked for a Large Accounting Firm & IMHO I wouldn't expect someone with a financial background getting something like this incorrect.
c b you wouldnt believe the stories of incompetence she used to come home with. There are idiots in all workplaces.
I_Ache I sympathise with you mate however it looks in this case like a very unfortunate timing issue with your wife ceasing employment prior to 5th April & all outstanding monies due to her being paid in the same tax year 😥
On the positive side here is a link to the [url= http://www.hmrc.gov.uk/incometax/stop-work-refund.htm ]HMRC Website[/url] so you can sort out how to claim any Tax refund after 5th April 2009 😀
Good luck to you, Mrs I_Ache & all I_Aches jnr.
Thanks mate.